Full Truck Alliance Ltd.
Full Truck Alliance Ltd. (“FTA” or the “Company”) purports to, with its subsidiaries, operate a digital freight platform that connects shippers with truckers to facilitate shipments in the People’s Republic of China (“PRC”). It offers freight listing, matching, and brokerage services and online transaction services, as well as various value-added services. Yunmanman and Huochebang were founded in 2013 and 2011, respectively, and both companies were digital freight platforms in the PRC prior to their merger which created FTA in 2017.
In June 2021, FTA sold about 82.5 million American Depositary Shares (“ADSs” or “shares”) in its IPO for $19 per share, raising nearly $1.6 billion in new capital.
On July 5, 2021, FTA reported that the Company was subject to a review by the Cyberspace Administration of China (“CAC”) and that “FTA’s Yunmanman apps and Huochebang apps . . . are required to suspend new user registration in China during the review period.”
On this news, the Company’s ADS price fell $1.27 per share, or 6.67%, to close at $17.75 per share on July 6, 2021, significantly below the IPO price, thereby injuring investors.
A securities class action has been filed against FTA on behalf of shareholders that purchased FTA ADSs in connection with FTA’s June 2021 IPO. This case has been filed in the U.S. District Court for the Eastern District of New York.
The complaint filed in this class action alleges that the Registration Statement made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose that: (1) FTA’s apps Yunmanman and Huochebang would face an imminent cybersecurity review by the CAC; (2) the CAC would require FTA to suspend new user registration; (3) FTA needed to conduct a “comprehensive self-examination of any cybersecurity risks”; (4) FTA needed to “continue to improve its cybersecurity systems and technology capabilities”; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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